The Supreme Court issued decisions in several major intellectual property cases in 2016. The subject matter of these decisions include willful infringement in patent cases, attorney’s fee awards in copyright cases and claim construction in administrative proceedings before the United States Patent and Trademark Office (“USPTO”).
Willful Infringement in Patent Cases
The Supreme Court issued decisions reviewing the test for awarding enhanced damages in the consolidated cases, Halo Electronics, Inc. v. Pulse Electronics, Inc., and Stryker Corp. v. Zimmer, Inc., on June 13, 2016. By statute, a district judge can increase a damage award by up to three times in a patent case when it is an exceptional case (see 35 U.S.C. 284). One circumstance that can lead to a finding that a case is “exceptional” is a finding that infringement is willful.
Prior to the issuance of the Halo and Stryker opinions, the Federal Circuit required judges to apply a rigid two-part test to show that an accused infringer acted with both objective recklessness and subjective recklessness. The Supreme Court rejected the Federal Circuit’s test and emphasized the ability of judges to exercise their discretion in making enhanced damage awards in patent cases.
Attorney’s Fee Awards in Copyright Cases
Three days after it issued the Halo and the Stryker opinions, the Supreme Court issued a decision on attorney’s fee awards in copyright cases in Kirtsaeng v. John Wiley & Sons, Inc. In Kirtsaeng, the Court considered a decision by the Second Circuit to affirm a district court’s denial of an award of attorney’s fees to an accused infringer that successfully defended a copyright-infringement lawsuit. The accused infringer was seeking over $2 million in attorney’s fees.
The Supreme Court approved the decision of the district court and the Second Circuit to give the objective reasonableness of the plaintiff’s position substantial weight in denying the fee award. However, the Court vacated the Second Circuit’s decision and instructed the district court to consider other factors, such as frivolousness, motivation, and the need in particular circumstances to advance considerations of compensation and deterrence in deciding whether to award fees.
Unsurprisingly, the Supreme Court’s approach in Kirtsaeng was similar to its approach in Halo and Stryker because, in all three cases, the Court emphasized the need to give judges flexibility in exercising their discretion in awarding attorney’s fees in intellectual-property cases. Another notable aspect of the Kirtsaeng decision is that the Supreme Court issued a decision on the merits of this case in 2013, so the 2016 decision represented the second Supreme Court decision in this case.
We'll conclude this discussion in our next blog.